Global upswing in medical writing, with a bout of M&A
The pharma industry has witnessed tremendous growth in the last decade with COVID-19 further fuelling the development of potential treatments, diagnostics, and vaccines at an unprecedented pace. There are now over 5000 companies involved in pharma R&D globally, approximately double that in 2012. The global pharma R&D spending increased from ~$130 billion in 2012 to ~$240 billion in 2022, leading to a doubling of the pipeline drug count.
This swift pharma R&D growth has in turn accelerated the growth of several associated industries, including medical writing. An increasingly stringent regulatory environment and an increase in patient awareness have further fuelled the demand for experts that can form effective communication in these critical documents. The global medical writing market stood at a value of approximately $3 billion in 2020; the industry is further anticipated to grow at a CAGR of nearly 10% between 2020 and 2027.
New regulations mandating reporting of clinical trial results and data transparency around the world are driving a constant proliferation of document types. Regulatory writing, including clinical and safety writing, contributes to 70% of the overall medical writing market and is expected to witness the highest CAGR in the coming years. Publishing of trial data is also witnessing growth – manuscripts, posters, congress deliverables, and graphic designing are typically outsourced in large volumes by pharma companies. Publications comprise ~15% of the overall market. Medical communication deliverables play a key role in educating physicians, as well as patients, about the available therapy choices. Health economics and outcomes research is also an upcoming part of medical writing as the federal government and insurance companies are taking measures to control the healthcare cost, driving the growth of such studies. These areas contribute to the remaining 15% of the market.
Medical writing: A fragmented industry that is currently observing consolidation
Medical writing is a fragmented industry with over 200 companies offering such services globally. There are a few full-scope CROs like Syneos Health, Paraxel, and IQVIA that offer medical writing services. However, the large majority of players are boutique companies like Cactus, Bioscript group, Trilogy, and Whitsell Innovations, which do purely medical writing, most of them specialising in a particular area of medical writing. There are several such boutique medical writing agencies with team sizes between 20-100 employees.
In the last few years, medical writing companies and CROs have been utilising various growth strategies to match the growing demand. The industry is witnessing active consolidation with at least 10 M&A deals in the past two years. The primary reasons for this spurt of acquisitions are the following:
# Market opportunity
The demand for medical writing deliverables is much higher than the capacities of most of these companies. Most companies will be able to capitalise on this demand if provided more human resources.
# Challenges with organic growth
There is a dearth of skilled medical writers in the industry. Hiring and training fresh medical writers on various document types can take several months. Additionally, the attrition rate in most writing agencies is 20-30%, leading to a severe scarcity of writers. Many companies rely on freelancers to meet their demands, but at times the quality of work gets compromised. Hence, companies with financial resources are utilising M&A as a rapid inorganic expansion strategy.
# Technology solutions to address medical writing inefficiencies
Medical writing processes are tedious with repetitive content across different documents. Technology solutions have shown initial promise in improving efficiencies by automating QC, formatting, redaction, and report writing. Early PoC studies have shown up to 80% time savings on clinical report generation. Technological adoption is critical to address the shortage of resources and will drive the next wave of partnerships.
Strategic expansion into new markets and verticals are the key themes for partnerships and M&A
Geographic expansion is one of the key motivations for partnerships and deals. Pharma companies worldwide are no longer limited to US-EU-centric trials and go for a more global approach. Local medical writing agencies are well-versed in the associated regulatory affairs and have a team that can better interact with local clients. Having a base outside their primary region also offers the advantage of a longer work cycle, due to time-zone differences. Hence, geographical expansion becomes of utmost importance.
US-based Certara, for example, acquired Insight medical writing for their regulatory affairs and medical writing capabilities in the UK. Veristat, a US CRO, acquired SFL Regulatory Affairs & Scientific Communication to expand in the European region.
And Asia, particularly India, is becoming a medical writing hub. Having a base in Asia, along with US-EU, practically offers a 24-hour work cycle. Moreover, there is a significant cost advantage of hiring resources in India compared to western countries. A drastic improvement in the quality of work and language skill sets in India over the years has contributed to the confidence of western companies to set up an office in India.
IQVIA, Paraxel, Syneos Health, and other larger firms have a notable medical writing team size in India. Smaller firms like Kateric, Criterion Edge, Xogene services, etc. have also set up medical writing teams in India to meet the rising demand.
Boutique medical writing agencies with adjacent offerings are often the target
Seven out of 10 medical writing companies that got acquired in the last two years had team sizes of between 20 to 50 employees. With a small team and revenues in the range of $2 million to $5 million, the M&A transactions and team integration are realisable. These companies are all based out of the US and UK and offer specialised medical writing and communication expertise, and most of them have over decade-long relationships with some of the large pharma companies due to their niche in medical writing.
One of the key motivations for such deals for the acquirer, as well as the acquiree, is the opportunity to up-sell/cross-sell individual offerings. Bioscript group acquired Valid Insight and Fortis Pharma in 2021 in order to extend their services in the market access and medical communications space. Syner-G group, a provider of CMC, technical, regulatory, and compliance consulting services acquired Impact Pharmaceutical Services to add medical writing capabilities to their portfolio.
Technology platforms also help create market differentiation. A few medical writing agencies have started building internal automation capabilities. Trilogy writing and consulting has an AI tool, Trilodocs, for clinical report creation. While Genpro research, MMS Holdings, and Morula Health all have their own technology platforms, with capabilities ranging from formatting and style to redaction management and report writing.
However, a handful of players are building technology platforms that can be integrated into medical writing organisations like Yseop, Narrativa, Arria NLG, etc. Adoption of such platforms will help boost efficiency. Clingenuity was acquired by Certara in 2015 to leverage their technology-enabled medical writing solutions.
New forays will positively impact the industry
With a steady hold on regulatory writing, safety writing, publications, and medical communications, the industry focus is now approaching health and economics outcomes research, real-world evidence, and digital communications. CROs and medical writing agencies are acquiring companies with specialised offerings to create an end-to-end service portfolio. Prime Global, a medical communications and market access organisation, acquired HCD Economics for their health economics and outcomes research and real-world evidence expertise.
To summarise, the recent increase in pharma R&D and regulatory updates have accelerated investments in the medical writing space. A similar pace of activity and consolidation is expected to last another year or two, with a few key players emerging as leaders in the industry. Technologies supporting medical writing processes are still a few years away from commercialisation, but once they mature they can significantly change the growth outlook and probably help productise a few low-hanging services.
It is an exciting time for the medical writing industry as it witnesses improving efficiencies, investments, and opportunities for growth.
About the author
Astha Tanna is a business analyst at MP Advisors, a biopharma strategy advisory firm that helps pharma companies and biotechs identify global growth opportunities. She is a bioengineer by training, with prior experience as a microfluidics engineer at start-ups in the diagnostics and genomics domain.